For anyone whose Deal home is held on a long lease, the message is clear – if nothing is done, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
Leasehold residencies in Deal with in excess of 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Deal,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Deal valuers.
Gabriel owned a studio flat in Deal on the market with a lease of fraction over sixty years outstanding. Gabriel on an informal basis approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 per annum. Ordinarily, ground rent would not be due on a lease extension were Gabriel to exercise his statutory right. Gabriel obtained expert advice and secured satisfactory deal informally and readily saleable.
Last Autumn we were called by Mr and Mrs. O Hill , who moved into a garden flat in Deal in May 2003. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparative premises in Deal with 100 year plus lease were worth £230,800. The mid-range ground rent payable was £60 billed per annum. The lease elapsed in 2086. Given that there were 60 years left we estimated the premium to the landlord for the lease extension to be between £24,700 and £28,600 exclusive of expenses.
Last year we were called by Mr F Phillips , who bought a garden flat in Deal in February 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be for a ninety year lease extension. Identical properties in Deal with a long lease were in the region of £166,800. The mid-range ground rent payable was £50 invoiced annually. The lease finished on 22 October 2076. Taking into account 50 years remaining we approximated the compensation to the landlord to extend the lease to be between £32,300 and £37,400 not including professional charges.